2008

The ESOP Association Will Celebrate 30th Anniversary in 2008

In 2008, The ESOP Association will celebrate its 30th Anniversary helping create better and stronger ESOPs and spreading the message of employee ownership in America.

To celebrate, a new logo has been specifically designed for use in 2008. The new logo incorporates the advocacy work and the Chapter program. For one year, it will replace the Association’s current logo.

For additional information about The ESOP Association, its advocacy work, or Chapter program, please visit the website at www.esopassociation.org.

Best wishes for a happy New Year!

Wednesday, January 09, 2008

What’s Important to Your ESOP in 2008?

This time of year is rife with to do lists, and things not to miss in the New Year, so let’s add one more – What would you like to see happen in the ESOP community in 2008?

Since we’re throwing out the question, it’s only right for us to start off the list:

1 – A meaningful discussion among members of Congress and the employee ownership community on how the new tax reform bill introduced by Congressman Charles Rangel, H.R. 3970, will hurt ESOPs.

2 – See several new co-sponsors added to the ESOP Promotion and Improvement Act of 2007, S. 1322, which was introduced by Senator Blanche Lincoln in 2007.

3 – Have the term “Ownership Society” become a meaningful term to the Presidential candidates.

What’s on your wish list?

Wednesday, January 16, 2008

Does Your Company Have a Communications Committee?

Each year the Economic Performance Survey (EPS), which is sponsored by the Employee Ownership Foundation, asks the question – Has your company created any employee participation programs since establishing the ESOP? In 2007, 53% responded no.

In the employee ownership community this is a bit of a contentious question and here’s why. Some people strongly believe that in order for true ownership to take place, there needs to be a committee to help disseminate information, organize meetings, and answer questions about the ESOP. This committee basically acts as a gateway and one-stop-shop for all ESOP related questions. However, others don’t feel it’s necessary. They’re all owners at the company they have access to information and can ask any question at any time making a committee unneeded.

There is no hard evidence either way but opinions are strong in this debate. Some companies attribute their success to the company’s ESOP committee while others don’t feel it would add anything to the company.

Does your company have an ESOP committee? If so, what type of activities does it plan and do you think it helps to educate the employees about the ESOP?

Wednesday, January 23, 2008

Missions & Visions

The Employee Ownership Foundation’s primary purpose is to support programs that will increase the level of awareness and appreciation of the benefits of employee ownership and increase the number of employees who have access to this benefit.

The Mission statement of The ESOP Association is to educate and advocate about employee ownership with an emphasis on ESOPs.

The Association’s Vision, which is a bit longer, reads:

We believe that employee ownership improves American competitiveness…that it increases productivity through greater employee participation in the workplace…that it strengthens our free enterprise economy and creates a broader distribution of wealth…and that it maximizes human potential by enhancing the self-worth, dignity, and well-being of our people.

Therefore, we envision an America where employee ownership is widely recognized as a catalyst for economic prosperity…where the great majority of employees own stock in the companies where they work…and where employee ownership enables employees to share in the wealth they help create.

And we look for our nation to become for all the world an example of prosperity with justice through employee ownership.

Most companies probably do have a statement similar to one of the above even if they do not necessarily call it by the same name. Each company is defined by what they do, sell, and their services. While not many people in the company realize it, a mission or a vision statement most likely does exist and is evaluated on a regular basis, whether through a formal process or just a few people discussing it at an opportune time.

The ESOP Association’s Board and the Employee Ownership Foundation’s Trustees meet every so often to discuss and evaluate the mission and vision of the organizations and discuss whether or not goals are being met.

What does your company do to ensure goals are met? Are your employee owners involved in the process at all?

Wednesday, January 30, 2008

Why Aren’t ESOPs Growing Faster in the U.S.?

This is a popular question in the ESOP community and there are a number of answers. Some suggest the number of ESOPs is growing but the number of terminated ESOPs each year keeps the number steady, so while there is growth, there are enough terminations to keep everything in check. Others believe the growth has stagnated and that numbers have dropped slightly.

In 2007, there were a number of news articles about newly created ESOPs and positive articles in trade publications about the pros and cons of being employee owned. However, the inevitable questions is always asked, why aren’t there more?

There are several popular theories on why more ESOPs are not created each year:

· Time involved in setting up the ESOP

· Feasibility study is expensive

· Ongoing administration costs are expensive

· A current owner may get more money if the company is sold outright as opposed to selling to the employees

· There is a loss of perceived control for the owner which leads to the theory of a psychological barrier to sharing information and ownership with employees

There are numerous reasons floating around out there and we want to hear them. Why do you think there are not more ESOPs?

February 2008

The following articles appeared in February 2008.

Wednesday, February 06, 2008

Ownership Society Back in the News

It’s election time again, in fact, that’s all the media are talking about at the moment.

Thanks to the upcoming election, the term “Ownership Society” has made its way back into the national lexicon. Yes, candidates once again wooing you for your vote are tossing about the term as a cure all for our nation’s healthcare system, retirement savings, and home ownership mortgage crisis. But does it mean anything to the employee ownership community this time around?

A few years back, the employee ownership community was quite enthralled to hear the term being used by President George W. Bush but, unfortunately, the thrill was short lived when the discussion turned out to be only about home ownership and healthcare.

Do you think this time around there will be more discussion about making employees in the U.S. real owners in the companies where they work or just another campaign promise?

What do you think the employee ownership community needs to do to change the debate?

Wednesday, February 13, 2008

Do You Manage Your Culture?

Every company is different. It is the company and its employee owners that create and define the culture and norms of each particular company. Each culture has its own way and rate of maturing and while some are very organic, others take a bit of coaxing to get them moving. So the question before us is this – Can a culture, an ownership culture especially, be managed and should it be?

You’ll probably find many different answers to this question. Many will tell you that yes, like all aspects of the business, the ownership culture will need to be managed to make sure it stays on track, while others will say that it comes about naturally and will be ever changing thus trying to manage it in a traditional sense is not possible. Obviously, it’s the nature of the company and its employee owners that make the culture and if there is not a “buy in” by either, than attempts at trying to create a culture will not happen.

What are your opinions on this? Should companies do more to manage their culture? Can a culture be managed?

If you’re interested in hearing what other companies do to motivate employee owners, check out the new ESOP Association video, “Creating a High Performing Company.” You can find it on The ESOP Association’s website at www.esopassociation.org or by contacting the Association at 202/293-2971.

Wednesday, February 20, 2008

Does Your Company Share Financial Information with Employee Owners?

It all comes down to dos and don’ts. Some do it, some don’t. But is there a happy medium? Is it important for employee owners to know the bottom line?

Obviously handing a packet of financial information to a person will not help increase his or her interest level nor will it make him or her a more motivated worker. If he of she is like most people, they probably won’t have any idea as to what they are looking at. If a company is planning on sharing financial information with employee owners, it’s very important to provide the information in the proper context. Teaching employee owners the basics is the first step and then making sure there is an open forum to ask questions would be another.

We would like to open the question to the community – Do you share financial information and why? Do you think it helps to motivate employee owners?

Wednesday, February 27, 2008

British Parliament to Study Employee Ownership

Why aren’t we doing the same thing?

According to the European Federation of Employee Share Ownership, the British Parliament has set up an “All Party Parliamentary Group on Employee Ownership” which will study employee ownership practices in the co-owned business sector. The group defines co-owned businesses as companies which own anything from a substantial minority to a controlling stake in the business.

The group is seeking evidence on the following: productive employee engagement, employee cooperation, corporate social responsibility, lack of awareness among business owners, advisers, financial institutions and policy makers, and inadequate government appreciation of and support of the co-owned business sector.

It’s interesting to see that we do share a number of concerns with our European counterparts and it will be enlightening to see what they find.

If you would like information about the survey, please visit the European Federation of Employee Share Ownership’s website at www.efesonline.org.

March 2008

The following articles appeared in March 2008.

Tuesday, March 04, 2008

How Do You Motivate Employee Owners?

The ESOP Association recently released a new video, “Creating a High Performing Company,” and one of the topics discussed in the video is motivational techniques.

Some companies offer prizes and gifts, and in the case of one company, a flat screen television for the person who suggested an improvement in a manufacturing process that saved the company money. Some companies recognize the work and contributions of employee owners at meetings, in company newsletters, or through company wide email announcements. Suggestion boxes are a popular tool at companies that want to keep the lines of communication open. In fact, some companies provide more than just a suggestion “box” to allow employee owners to ask questions and voice concerns; they hold regular meetings and have Q&A sessions with company leaders and anyone in the company can ask a question and have it answered. These companies feel these open meetings are a way for employee owners to have a say and knowing there is a venue for questions and concerns, are motivated to make sure the company stays the course.

Do you think these techniques or tools help to motivate employee owners? What does your company do to help motivate employee owners?

If you’re interested in a copy of the video, you can find it on The ESOP Association’s website at www.esopassociation.org or by contacting the Association at 202/293-2971.

Thursday, March 13, 2008

Open Book Management – Does Your Company Practice?

In employee ownership circles, the term Open Book Management (OBM) is often discussed and there are numerous companies that incorporate the practice and theories into their workplaces.

The theory behind OBM is that all employees are provided information on the financials so they can and, hopefully, will make better and more informed decisions as workers and in the case of an ESOP company, as owners. The employees are also provided with training so they can properly read and understand the financial information and then provided with a forum to discuss the information.

Each ESOP company is different in terms of what information is shared and how much. There are no hard and fast rules as to the right amount but most people in the employee ownership community can agree that the sharing of some information is important for an ESOP company to fully develop an ownership culture and mindset.

Does your company practice OBM? Do you think it makes your company more proactive and able to handle crises better because of the open environment?

Wednesday, March 19, 2008

Does your company advertise that it is employee owned?

For many companies, every day is spent trying to decide how to properly market the company to customers, potential customers, employees, and shareholders. If you’re an employee owned company, does it change they way you describe your company? Does it change your advertising or marketing practices?

In 2005, the ESOP Company Survey, which was done jointly by The ESOP Association and the Employee Ownership Foundation, asked companies if they advertise the fact they are employee owned. 75% of respondents indicated they advertise the ESOP and employee owned status on company vehicles, on business cards/letterhead, on the website and in promotional materials. Word of mouth was also very important to these companies.

In numerous press clips over the past year, we have noticed that more companies than ever are being described as employee owned.

What does your company do to let people know it is employee owned? Do you think your employee owned status increases business?

Wednesday, March 26, 2008

Bear Stearns and Negative Media Coverage

Well, once again, Enron comparisons are running rampant. As you have probably heard, Bear Stearns, which is in the process of being acquired by JP Morgan Chase, had an ESOP. Bear Stearns’ stock ownership among employees was no where near the level of Enron (estimates put the size of the ESOP around 3%), employees had much diversification in their primary retirement plan, a 401(k) plan, and the stock ownership was primarily among the top executives and senior executives. However, these facts have not changed the media’s view and while most of the stories are now revolving around the buyout and what will happen to the stock, there are still a few negative references to the ESOP and employees’ retirement savings.

We covered this topic earlier in regard to the Tribune Company buyout but we thought this was a good time for a reminder. Many media outlets have blogs and discussion forums on their sites and reporters do lurk on the blogs and forums for story ideas. If you see a story, get chatting about what employee ownership has meant to you and your company. Be frank in your discussion of why the ESOP is important to you, your fellow employee owners, and your company. You might tempt a reporter with a positive story idea about ESOPs in your area. There’s no better way to counteract a negative story than with a positive one.

April 2008

The following articles appeared on the blog in April 2008.

WEDNESDAY, APRIL 02, 2008

Does being an ESOP company increase productivity?

The 2007 Economic Performance Survey which was conducted by the Employee Ownership Foundation asked members of The ESOP Association this question about productivity – How has the ESOP affected overall productivity of employees? 68% of individuals that responded to the question said it increased productivity. In fact, this number has remained over 58% since 2000.

Need less to say, this is not a scientific survey and is certainly only a sampling of ESOP companies but to say that 68% of companies believe the ESOP increased productivity of workers is impressive. Other surveys have also indicated that an ESOP can increase productivity such as this survey by Dr. Steven F. Freeman at the University of Pennsylvania – http://repository.upenn.edu/od_working_papers/2/.

What do you have to say, does an ESOP increase productivity?

WEDNESDAY, APRIL 09, 2008

Progress, But No Victory, No Let Up

This article originally ran as the Washington Report column in the March 2008 issue of the ESOP Report. We thought it was worth a reprint on the Employee Ownership Blog. It has been edited for space but the message is the same.

For several months after the publication of the tax reform legislation introduced by the Chair of the House Ways and Means Committee Charles Rangel [D-NY] it seemed many ESOP company leaders felt its small provision on S ESOPs was not of any concern.

There is progress in turning this impression around, as more and more S corporations with ESOPs are realizing that if Chair Rangel’s provision became law, it would have a significant negative impact on their ability to compete, and on the likelihood of new S ESOPs being created by seller financing, or mezzanine financing. [The precise provision is Section 3701 of H.R. 3970, introduced last October.]

And as this impression grows of the potential negative impact if Section 3701 becomes law, more and more ESOP advocates are voicing their concerns to offices of U.S. Representatives.

This fact represents progress in making sure the S ESOP laws remain usable and attractive for the development of more employee ownership in America, and for the successful operation of current S ESOP companies.

As a result of more companies expressing their views to their elected members of the House of Representatives, agents of The ESOP Association were asked to give more detail to top tax lawyers/staffers of the House Ways and Means staff. These views were given, but no views were changed.

Worst Case Scenario: When running conducting a legislative advocacy campaign, the best planning is to do worst case scenario planning. With regard to Section 3701, the worse case scenario is that this anti S ESOP provision is not held back by Chair Rangel for consideration in 2009 or 2010 as part of a massive tax code overhaul, but that it is taken up tomorrow as part of some relatively small tax bill, say dealing with agriculture, or stimulating the economy, and similar provision in order to raise revenue that would pay for the tax cuts in the smaller tax bill.

There is a general rule of thumb that once a tax law change is introduced by the Chair of the House Ways and Means Committee, and has been “scored” as they say in the tax legislative process, meaning an estimate has been made as to how much new tax money the provision will raise, that proposed change becomes fair game for any member of the Committee to propose to pay for her or his pet tax cut idea. [Please see page 1 story on how The ESOP Association has joined other benefits groups to alter Congressional policy that assigns big tax loss numbers to retirement savings tax laws.]

So, there is no reason for the ESOP community to sit around “waiting” for tax reform to tell their member of the U.S. House that they do not like Section 3701.

It should be done today, if not sooner.

The Association’s website has all the ammo needed to make the case against Section 3701, both under the News topic related to a Congressional visit to an ESOP company, and under the News topic labeled “Advocacy Kit.”

To repeat, despite evidence that some members of Congress have registered concern about Section 3701 to the House Ways and Means, there is no evidence that the leadership of the Ways and Means Committee is willing to alter the provisions of Section 3701. The provision, as introduced, can be so harmful our ESOP community should not wait to see if it will be considered. It could be considered at any time.

FRIDAY, APRIL 18, 2008

S. 1322 – The ESOP Promotion & Improvement Act of 2007

Now is the time to act!

The ESOP Promotion and Improvement Act of 2007 was introduced earlier this year by Senator Blanche Lincoln (D) of Arkansas.

Now is the time to contact your Senators and talk to them about this legislation. In light of the legislation introduced by Representative Charles Rangel, now is the time to reach out to your member of Congress. Contact their office and ask to arrange a visit to your company. If you can’t arrange a visit to your company, make an appointment to go see them, or send a letter from the employee owners telling him/her why the ESOP is so important to your company and employee owners and what they can do to keep these jobs in their community.

Earlier this month, The ESOP Association presented 129 corporate members of the Association with a Silver ESOP Award to recognize their work in sustaining their ESOP for 25 years or more.

J. Michael Keeling, President of The ESOP Association stated, “I am very pleased to be able to present these companies with the Silver ESOP Award for their work to sustain their ESOP. We are working with our members to promote the ideals of employee ownership and to increase the number of ESOP companies in the U.S. As these companies have clearly shown, sharing wealth with employee owners creates greater economic prosperity and strengthens our free enterprise economy. Congratulations to all of them for their work.”

Congressmen Maurice Hinchey (D-NY) and Dana Rohrabacher (R-CA) introduced on April 24, 2008 House Concurrent Resolution 333, which expresses continued support for employee stock ownership plans (ESOPs) in the U.S.

J. Michael Keeling, President of The ESOP Association, had this to say about the Resolution: “I welcome the bi-partisan efforts of Congressman Maurice Hinchey (D-NY) and Congressman Dana Rohrabacher (R-CA). The leadership of these House senior members to reiterate the thirty plus years of support for employee ownership through ESOPs is important. Clearly change is in the wind but a commitment by Congress to a fair and more equitable form of ownership is as important in the 21st century as in the 20th. On behalf of the 2,500 plus members of The ESOP Association, I urge all members of Congress to co-sponsor this resolution. Research has consistently shown that employee owned companies are high performing, have better sales, and provide more retirement savings compared to their non-ESOP counterparts.”

To view a copy of House Concurrent Resolution 333, please visit the Library of Congress THOMAS page, http://thomas.loc.gov/. On this page, type H. Con. Res. 333 in the search bill text box, check the bill number box, and hit search.

Wednesday, May 07, 2008

Come See the AACE Winners

The 2008 AACE Award winners will once again be featured at The ESOP Association’s Annual Conference in Washington, DC, May 13 & 14, 2008.

There’s no better way to understand a communications program than to talk to the people who run them. If your company is looking for ways to increase communications or to get employee owners involved, the AACE Awards could be your answer. The Annual Conference features a large exhibit of the AACE entries which are available for browsing and winners will be at the conference as another source of information.

Wednesday, May 21, 2008

Teaching Employee Ownership

The Employee Ownership Foundation and the Foundation for Enterprise Development Fund Aspen Institute’s Work on Broad Dissemination of Employee Ownership Teaching Materials to Business Educators

The Aspen Institute is an international nonprofit organization dedicated to fostering enlightened leadership and open-minded dialogue. As part of the Institute’s Business and Society Program, the Center for Business Education (CBE) maintains close ties with major MBA programs in 23 countries. A grant to disseminate employee ownership teaching materials from the Foundation for Enterprise Development (FED) to the CBE of the Aspen Institute received substantial funding from the Employee Ownership Foundation. This grant funds the CBE network, publications, distribution systems and awards program to identify and disseminate employee ownership teaching materials to over 110 business schools. This collaborative project by the Foundation, FED, and CBE was initiated in March 2008.

More information about the program will be available later this year.

Since the beginning, employee ownership and ESOP advocates have pined for the day when our colleges and universities would teach employee ownership in order to have tomorrow’s business leaders knowledgeable about the power of employee ownership. Do you think teaching employee ownership will make a difference in this nation’s leaders’ knowledge and support of employee ownership and ESOPs?

Wednesday, May 28, 2008

Sustainability of ESOP Companies Debate Intensifies

When the oldest ESOP companies were ten years old at best in the mid-80s, or even 15 years old in the early 90s, the word “sustainability” was not in the lexicon of the ESOP community.

Beginning about four to five years ago at The ESOP Association’s New England Chapter meetings that were retreats for Board members, or CEOs of New England ESOP companies, several participants were surprised when other business leaders put this topic on the table—why are so many ESOPs terminated each year? Is there something about the ESOP model of employee ownership that makes it impossible to sustain employee ownership through an ESOP more than 10 to 15 years?

At first observers of this discussion assumed that the discussion was all about handling repurchase obligations, and that having a cost effective, predicable methodology of handling repurchase obligations would dispose of the sustainability discussion.

But the discussion is about much more than repurchase issues.

The most intriguing one is about how the first generation of ESOP managers, particularly the first CEO of the company when it became ESOP, who loves being ESOP, plans for a succession that results in a new CEO who also values employee ownership? ESOP Association records show that many ESOP companies that drop membership in the Association due to ESOP termination have a characteristic that is simply that the company’s first ESOP CEO, and sometimes CFO, have been succeeded with what is called second generation ESOP company management. Often these men and women, in the second generation, see the ESOP as a hindrance to proper use of the companies capital because repurchase obligations are soaking up so much of its available capital. Oddly, often the first generation ESOP leaders hand pick their successors, and assume that their successors will be pro-ESOP.

So, sustainability discussions have become very much succession planning discussions. How does the ESOP company current CEO and Board pick successors that will want to do what is necessary to keep the ESOP in place?

And here is another sustainability issue that comes up: How does a mature ESOP company, dedicated to remaining ESOP keep the ESOP spirit alive? The question is entwined with the issue of what is loosely called the “haves” and the “have-nots” in the ESOP company where the leverage was paid off five to ten years earlier. In such a situation, senior employees have enjoyed the magic of leverage and have significant account balances, whereas co-workers, perhaps doing the exact same job at the same pay, who joined the company after the ESOP debt was paid, have much fewer shares in their ESOP accounts, and thus are “lesser” owners.

Another issue of sustainability comes up with dealing with the ERISA law that the trustee of the ESOP is to maximize the value of plan assets, putting into play the question of does the trustee accept any offer to purchase the company that increases account balances? Can sustainability be changed with a tweak in ERISA law for ESOPs? Is such a tweak desired, or even obtainable given that this law is not a tax law, but a law that would be in the Congressional labor committees which do not have a history of being favorable to ESOPs as retirement savings take priority over the ESOP’s ownership purpose in the Congressional labor committees.

Why do we want the answers? One, the leaders of ESOP companies and the employee owners should enjoy what they enjoy—if they like being ESOP, they should have the tactics and strategies to remain being an ESOP. Secondly, there is a large public policy issue involved that will grow with time. The issue is how can the ESOP community maintain, or shall we say “sustain” special laws promoting ESOP creation and operation if the ESOP model of employee ownership is not sustainable, when one major justification used by the ESOP community is how much more competitive, productive, and wealth generating ESOPs are compared to non-ESOP companies?

This story is potentially the most damaging we have seen for a very long time. ESOP Association President, J. Michael Keeling sent a letter the editor, which is posted below.

The article states that “employees are being cheated out of their retirement at a company in Florida” and that basic laws governing ESOPs in private companies can be manipulated. The article also implies that in all ESOP companies management can do things to lower share price while enriching their own wealth, that employees should control whether to sell ESOP stock, that they are not real owners, and are more often than not purposefully left in the dark about the financial conditions of the company, among other things.

The New York Times is very influential in New York City in shaping the opinions of public policy decision makers, one of whom is Congressman Charles Rangel (D-NY), Chair of the House Ways and Means Committee. We’re sure his staff also faithfully read The New York Times.

It was an unbalanced story and, unfortunately, ignores the 30 plus years of research that show that ESOP companies are more productive than their non-ESOP counterparts.

J. Michael Keeling’s letter to the editor

May 29, 2008

Dear Editor:

I am writing in response to the article by Mary Williams Walsh, “In Stock Plan, Employees See Stacked Deck,” which ran on May 29, 2008.

As an advocate for ESOP companies, I was taken aback by the unjust assessments put forth in the very one sided and negative article.

Ms. Walsh’s story cast all employee owners through ESOPs in a very destructive light because of an unresolved controversy at one company. The article ignores a huge body of research which provides evidence that ESOP arrangements are good for the company, increase sustainability and productivity, and provide in the vast majority of instances more wealth than other employee benefit plans. Data indicates employees at ESOP companies are better paid, and are more likely to have benefit plans in addition to the ESOP.

A balanced report on company employees and their ESOP would serve our national debate over distribution of wealth and ownership policies better.

Tuesday, June 03, 2008

The New York Times Article Continued

Below are a few of the letters to the editor that members of The ESOP Association shared with the Association. We know many people sent letters and we appreciate their efforts. Below is just sampling of what was shared with the Association.

The article “In Stock Plan, Employees See Stacked Deck” unfairly suggests that all companies who adopt Employee Stock Ownership Plans (ESOPs) are guilty of creating an especially pernicious lie – – that of promising employees a “piece of the rock,” when in fact managers and others use the ESOP law to keep the diamonds to themselves. If the plaintiffs’ allegations are true, the U.S. Sugar case represents more the continued fallibility of humankind than it does a breakdown in the law governing ESOPs. Consider the following propositions: Does the recent meltdown in home mortgages mean that the country should never allow adjustable rate mortgages? Does the failure of Bear Stearns mean that we must do away with any financial instrument that is more exotic than a savings book account?

I have spent much of the last 14+ years in and around ESOP companies. Statistical data demonstrates that properly run ESOP companies (i) do better than their competition, (2) offer better benefits, (3) generate more retirement benefits than 401(k) plans and (4) keep jobs rooted in the local economy. Your reporter of this significant story quite correctly devoted substantial print space to disappointed former employees at U.S. Sugar. She would have served your readers better by also speaking with employees at companies with ESOPs that continue to operate or that have sold and reaped a windfall for all employees. Indeed, here in Vermont, she could have spoken to any number of ESOP owned companies that are leaders in their field like Gardeners Supply Company, Carris Reels and King Arthur Flour Co. where employees would be glad to talk about how empowered they are in the economic lives of their firms.

The U.S. Sugar situation may indeed be a tragedy. But it is one that can be repaired with legal redress to the courts. Creating the impression that ESOPs are somehow bad for employees or do not give employees the promised benefits is a greater problem. By not carefully considering and reporting upon the great majority of ESOP employee owners who have benefited from the landmark ESOP legislation these last 30+ years, this article tells far less than half the story about one of the greatest Congressional legislative achievements of the post-Great Society era.

Full disclosure: The writer is an attorney with a practice focusing on advising businesses on the creation and implementation of ESOPs and helped to found the Vermont Employee Ownership Center based in Burlington, Vermont.

Stephen P. Magowan

Steiker, Fischer, Edwards & Greenapple

Burlington, VT

__________

Dear Editor,

Reading your May 29 article, ‘In Stock Plan, Employees See Stacked Deck’, a reader might walk away discouraged by what ESOPs have to offer. But a rather broad brush stroke was used to paint ESOPs and I’m afraid that doesn’t do justice to the many high-performing employee-owned companies that have a deep and abiding trust in and respect for employees.

In 1996, the owners of 200 year-old King Arthur Flour had the option to sell the company to larger, out-of-state corporations or to sell the company to the employees. They chose the latter and as a result, 175 jobs remain in our rural Vermont community. With each passing year, we see more progressive companies taking buyouts from larger, remote owners and within months, the jobs disappear. King Arthur Flour, on the other hand, which is 100% employee-owned, remains headquartered in Vermont and is repeatedly named the best place to work in the state. Since launching the ESOP, King Arthur Flour has grown from a handful of employees to nearly 200, it has increased the number of states in which its flour was sold from 11 to 50 and has grown sales from $10 million to $70 million. Data gathered over more than a decade by Rutgers University researchers from more than 1,100 privately held ESOP companies matched against their privately held, non-ESOP counterparts, showed that ESOP companies, on average, had more than 2 percent higher sales each year, were nearly 16 percent more likely to survive than non-ESOP companies, and were more likely to provide better benefits such as health insurance, 401K plans and profit sharing.

When I graduated from business school five years ago, I wanted to join a socially-progressive company and I’ve come to believe that employee ownership is one of the most sustainable and socially-progressive commitments a corporation can make. Ask most people if they would rather work for an employee-owned company or a non-employee-owned company and I bet they would choose an ESOP. How do I know? Because I made that very choice.

Sarah McGinley-Smith
Employee-Owner
King Arthur Flour Company

Norwich, VT

__________

To Whom It May Concern:

I am not arguing an isolated case of ESOP abuse exists. However, in our case as well as many others, the ESOP offers many opportunity. We have over 20% minority ownership of African Americans, Hispanics and Women, who would otherwise not have had the ability to own a portion of a private company, let alone with no money of their own put forth. The ESOP is 100% owned by its employees.

Without ESOP’s, our company would have been owned by two, wealthy, white males until they sold to a large corporation, which would have resulted in many job losses and closures of facilities. Instead, the employees were able to use bank financing to purchase the company with no money out of our pockets, and no creative stock compensation for its officers. The stock price over the course of the ESOP has increased at least 50% with warehouse staff and field employees retiring with 6 figure retirements. To target ESOP’s is unfair when publicly traded companies have CEO’s and management abusing their privileges and compensation all under the watch of the SEC. In ESOP’s, all participants have the ability to contact the Department of Labor at anytime they suspect abuses.

If your paper would ever be interested in doing a story on an ESOP success story, please feel free to contact me at 513-378-9509.

Thank you for your time and consideration. As always, I appreciate the insight, depth and breadth of the New York Times and it’s online access. Best of Luck.

Andrew J. Kulesza

Treasurer / CFO

R.E. Kramig & Co., Inc.

Cincinnati, OH

__________

To The Editor:

In response to the May 29 article by Mary Williams Walsh, I write in defense of employee stock ownership plans (ESOPs) in America, and as a former participant in one such plan that has been successful for 20+ years. There are far too many ESOP success stories to paint all ESOPs with a negative brush. To do so is tantamount to labeling all businesses as unethical due to the transgressions of WorldCom, or condemning all journalists due to the plagiarism of one New York Times staff member.

IF inappropriate decisions were made at U.S. Sugar, then focus on the circumstances of this company and refrain from denouncing all ESOPs as being stacked against the employee owners. To learn about ESOPs from another perspective visit www.esopassociation.org and research the hard data on the performance of ESOPs and the equity wealth created for everyday employees.

Stephen C. Sheppard

Decorah, IA

__________

Dear Sir or Madame:

I’m writing regarding the page 1 article today (May 29, 2008) by Mary Williams Walsh titled: “In Stock Plan, Employees See Stacked Deck”. The article focused exclusively on U.S. Sugar, which is only one of more than 10,000 ESOP plans nationwide. The mere fact that U.S. Sugar has chosen to bar their former employee/owners from attending the annual shareholders meeting suggests it’s management team doesn’t understand how ESOPs should work. And the employee/owners have obviously suffered because of their ignorance or incompetence.

However, for the sake of journalistic balance I believe it’s vitally important to present facts about ESOP plans in general as opposed to singling out one organization alone as if it was indicative of the majority. For instance according to the ESOP Association:

“Research done by the Washington State Department of Community, Trade and Economic Development of over 100 Washington not publicly-traded ESOP companies compared to 500 not publicly-traded non-ESOP companies showed that the ESOP companies paid better benefits, had twice the retirement income for employees, and paid higher wages than their non-ESOP counterparts.”

It would be easy to dismiss this research as limited to Washington State alone, but a January 2007 article confirmed these findings in a study titled: “Effects of ESOP Adoption and Employee Ownership: Thirty Years of Research and Experience,”. This exhaustive studyauthored by Dr. Stephen F. Freeman, Affiliated Faculty and Visiting Scholar in the Center for Organizational Dynamics, Graduate Division, School of Arts and Sciences at the University of Pennsylvania, confirms The Washington State study and summarizes by stating:

While I greatly appreciate Ms. Williams Walsh publicly exposing the problems employee/owners have faced at U.S. Sugar I want to ensure your readers understand the vast majority of ESOP plans provide a rare path to employee/ownership that has proven to be richly rewarding to the vast majority of participants over the past 34 years.

Very truly yours,

Jeff Harris, ChFC

Jeff Harris & Associates

York, SC

__________

Sirs:

It appears that my original response exceeded a suggested word length and also should have been referenced to MARY WILLIAMS WALSH. Hence a re-submission:

“I am disturbed by the article by Mary Williams Walsh “In Stock Plan, Employees See Stacked Deck”. I am disturbed because the article makes it appear that any ESOP company can be manipulated easily by dishonest company officers.

Unfortunately dishonesty is possible under any form of company ownership.

An ESOP company has many safe guards to prevent fraud, such as complete education of the employees to understand their ownership responsibilities, how to understand the independent stock appraisal, and other company financial information. Also, I believe, and so do many other ESOP company leaders there should be a competent, honest trustee of the ESOP, employee participation, and independent financing of the ESOP debt used to acquire stock for the ESOP.

The final payoff for success of the ESOP company is difficult to attain and maintain, but not impossible as the article implies.

I do not know how the U.S. Sugar lawsuit will be resolved, but your readers deserve to be informed of the ample data over the last 30 plus years that the vast majority of ESOP companies that are privately held are much more successful than their non-ESOP competitors.”

Don Sweatland

Warsaw Chemical Co. Inc.

Waraw, IN

__________

ESOPs have been in the tax code since 1974 and a number of studies have shown that companies with ESOPs are more productive and provide higher retirement benefits than comparable companies without ESOPs (Douglas Kruse and Joseph Blasi-Rutgers; NCEO and Workers’ Compensation Costs; Washington State Study-1998). In most private companies the ESOP is provided as an additional benefit with no cost to the employees and there is usually an additional plan, such as a 401(k) in place. We have been working with ESOP companies across the U.S. for over 24 years.

Don Israel

Donald M. Israel
Benefit Concepts Systems Inc.

New York, NY

__________

If the courts find the leaders of US Sugar to be as you’ve portrayed them, it will prove that greed and employee exploitation still exist the world. Unfortunately, you’ve tarnished the the idea that employee ownership can be a very good thing for both businesses and their employee owners.

For every juicy story like US Sugar, there are hundreds of very boring ESOP stories about companies whose leaders do the right things and whose employees retire at levels of comfort they couldn’t possibly have enjoyed without having had a stake in their companies. As president of a 50 person company which is 75% employee owned, I get much satisfaction from seeing happy retirees. Even more, I enjoy seeing people happier in their day to day work because they know their efforts will benefit them personally. If those aren’t reasons enough to do the right things, the fear of ample numbers of plaintiff’s attorneys, IRS agents and Department of Labor officials is enough to keep most leaders playing by the strict and well defined ESOP rules.

Ken Mogren, President

Winona Agency, Inc

Winona, MN

__________

Dear Editor:

As an employee-owner in an ESOP company, I am very dismayed by your article concerning U.S. Sugar published on May 29, 2008. My dismay is twofold: your article seems to imply that the laws, regulations and controls in place around ESOP plans provide inadequate protection for ESOP participants; and your analysis of the specifics of the U.S. Sugar plan do not provide enough information to be considered fair and independent reporting.

I am an employee of North Highland, a 100% ESOP-owned management consulting firm headquartered in Atlanta, Georgia with offices in 14 cities, including New York City. In my role at North Highland, I am very involved in the process of using an outside valuation firm and independent trustee to determine North Highland’s stock price.

First, let us look at the regulations surrounding ESOP laws and regulations. On the issue of setting ESOP stock value, I believe that participants are effectively protected with the current laws and regulations. As you mention in your article, an independent appraiser is responsible for setting share value. Further, the trustee of the ESOP plan is responsible for reviewing the valuation to ensure that the value is appropriate. The current ESOP regulations make several parties responsible and liable for errors made in the valuation process. However, it is possible, for management to manipulate the valuation process by withholding information from the appraiser and the trustee. In the unlikely event of outright fraud, it is true that the employees would need to seek legal remedies to obtain fair value for their shares. I am confident that ESOP companies have a far better record of fairness to (beneficial) shareholders than do most privately held companies have with minority shareholders.

Your article is also critical of the fact that shareholders in ESOP companies have few rights and protections, such as being able to sell to a third party. You fail to point out that this is the case for minority shareholders in most privately held companies.

Second, on the facts of the U.S. Sugar case, several points in your article are incomplete and misleading. A good example is the section concerning the family’s increasing ownership in the company. You quoted the complaint in the lawsuit that mentioned that as participants cashed out of the plan, there were fewer shares outstanding, resulting in a 19% increase in ownership by Mr. White’s family. This is misleading because the remaining participants in the ESOP also realized an increase in ownership of 19%. The shareholders outside the plan get the same increase due to concentration of the stock as the plan itself. Your failure to point out this fact shows either a lack of research on your part or an intentional bias against ESOPs.

You article also made reference to an offer to buy U.S. Sugar for $293 per share. You failed to mention whether this was a binding offer. If not, the final offer might have been much less. Further, even if it was a binding offer, it is very possible that the Board of Directors refused to consider the offer because of the negative impact it would have had on employees. In the worst case scenario, it is possible that Lawrence Group, the acquirer, would have shut down the entire company to gain market share, and all of the employees would have lost their jobs. So the $293 offer might have been much less attractive than you made it seem. Last, you provided no comparison between the pre-ESOP retirement plan and the benefits that were provided by the ESOP plan. The $90,000 that Mr. Smith received might have been far greater than the benefits he would have received under the prior retirement plan.

While I do not know whether employees were cheated out of fair value at U.S. Sugar, I am confident that if they were cheated, the court system will provide adequate compensation. I believe that in the interest of fairness, The New York Times should provide its readers with at least a few of the thousands of stories of successful ESOP companies that have distributed billions of dollars of wealth to millions of employee-owners in the United States.

Charles A. Morn

North Highland

Atlanta, Georgia

__________

Modern Group Ltd, www. moderngroup.com , of Bristol PA. is a 100% employee owned company through it’s ESOP. We are a private company. For more than 60 years we have enjoyed 10 percent growth in our stock. Our employee’s have benefited by receiving through the ESOP, 401K contribution match, and out-right cash bonus, more than 50% of the retianed earnings of the company, some $42 million dollars. We have enjoyed significant growth and have an exceptionally strong balance sheet for our industry. Our employees vote for the outside board of directors and we have a long tradition of open door/open book management. We take very strong exception to the position of the May 29th article on ESOP’s. I would caution you to look at the number of ESOP companies that through the ESOP program have been able to transition generations, provide great places to work, and have created wealth for their employees. I do not dispute that there are bad apples in every barrel, but you could have represented both sides.

David E. Griffith

President & Chief Executive Officer

Modern Group Ltd.

Bristol, PA

__________

Via Email

Re: ESOP Article

To whom it may concern:

Your employee stock plan article missed the most important point; had the U.S. Sugar employees been given the right to vote their stock, they may have been overruled by the trustee. Under Department of Labor guidelines, had the employees voted “wrong,” then the trustee is essentially required to overrule the employees.

For example, if the employees had voted to accept an offer to “take the money and run,” but the trustee had decided that the offer was not acceptable, then the trustee would have rejected the offer. If employees are upset about not being able to vote, then perhaps they should complain to the Department of Labor.

ESOPs are intensely regulated by both the Department of Labor and IRS. In the two-volume, seventeen-hundred-page book, Employee Stock Ownership Plans, that I co-author, we have a fifty-page chapter on “ESOP Trustee and Fiduciary Issues”, and the legal chapter is one-hundred and thirty pages!

The article does a disservice to the more than 11,000,000 employee owners who over the past thirty-four years have benefited immensely from ESOPs.

Sincerely,

Ronald J. Gilbert

President

ESOP Services, Inc.

Scottsville, VA

__________

Editor:

While your piece on US Sugar may be accurate for that company it does not accurately reflect what happens at the vast majority of ESOP companies.

Congress changed the law in 1986, yes over 20 years ago, on pass through voting rights. Stock acquired by the ESOP after 1986 has voting rights. Our Employee owners elect our Board of Directors each and every year and are urged to attend the annual meeting or vote by proxy.

The ESOP holds a 38% ‘block’ of stock. That minority interest is not enough to force a sale of any company, public or private.

Diversification IS essential to retirement planning. Why did employees making $23 an hour NOT have other investments like an IRA? Why is it the sole responsibility of the company and not of the individual? ESOP’s are funded out of company profits. Employees do NOT put in any of their own money out of pocket. I think getting $90,000 at age 55 is pretty good for just doing your job!

The limited amount of information in your article leads me to blame market forces for US Sugar’s problem. The US consumer will not pay to support $23 an hour workers and their benefits, whether for sugar, steal, or automobiles. What about shareholders in Companies in those industry’s?

Paul Culler

President

J.R. Holcomb & Co. Established 1872

100% Employee Owned since 1989

Cleveland, OH

Wednesday, June 18, 2008

Communications Programs

We’ve discussed communications programs before in this space but as a follow up to the AACE Awards posting a few weeks ago, we thought it might be a good time to bring it up again.

The AACE Awards recognize the outstanding communications programs of ESOP Association members. (If you would like more information about the program, visit the Association’s website http://www.esopassociation.org/resources/resources_AACE.asp.) Every entry exemplifies the commitment and work these companies put into their programs. These are truly excellent examples of the work being done by ESOP companies to communicate the importance of ownership to the employee owners.

We know that many ESOP companies and Association members have programs such as this and we want to know about them. Tell us what you do to communicate at your company.

Wednesday, June 25, 2008

New Research Confirms Majority-Owned ESOPs More Productive Than Non-ESOP Counterparts

Recent research by Brent Kramer, a doctoral candidate at the City University of New York, “provides strong evidence that majority employee-owned businesses have a significant advantage over comparable traditionally-owned businesses in sales per employee.” The average advantage, $44,500, means that a typical 200 person ESOP firm could be expected to have an almost $9 million annual sales advantage over its non-ESOP counterpart. Sales per employee is the total of a company’s sales divided by the number of employees, and is a commonly used measure of a company’s productivity.

A few highlights of the study:

Using standard statistical methods, it was found that the average sales advantage for the ESOP firms in the study was $44,500, or an average of an 8.8% sales per employee advantage over their non-ESOP counterparts in the same industry and of the same size.

It was found that firms that ask for non-management employee input into innovation in work processes have a greater employee-owned advantage in sales per employee.

Kramer’s research indicates the sales per employee advantage for the 50% plus ESOP companies compared to non-ESOP companies is less for larger employers.

The study, Employee Ownership and Participation Effects on Firm Outcomes, was conducted by Brent Kramer, an economics doctoral candidate at the time of the study and now a Ph.D. The Employee Ownership Foundation, the 501(c)(3) affiliated foundation of The ESOP Association provided funding for the research and The ESOP Association contributed membership information for the study. A total of 328 ESOP firms and over 2,000 matching non-ESOP firms were included in the study.

July 2008

The following articles appeared in July 2008.

Wednesday, July 02, 2008

Winning AACE Award Video Available on Website

The winning video by Harrell Remodeling, Inc. of Mountain View California, impressed judges with its practicality, fun attitude, and clear ESOP message. It showcases the company’s teamwork, dedication, and never give up attitude.

Take a look for yourself.

Wednesday, July 09, 2008

Presidential Candidates and ESOPs

As the Presidential Campaign unfolds, many ESOP advocates have asked about the nominees’ position on ESOPs. We do not have a written statement or any other evidence from Senator John McCain on his view of employee ownership through ESOPs, but we do have a 2005 letter from Senator Barack Obama which we have posted below. The letter was written to several of The ESOP Association’s members in Illinois, when they wrote to him asking that he co-sponsor Senator Blanche Lincoln’s pro-ESOP bill, S. 1322, The ESOP Promotion and Improvement Act of 2007.

We welcome comments.

Thursday, July 17, 2008

August Recess is Approaching – Time to Setup a Meeting with Your Member of Congress

August means one thing in Washington, DC – summer recess for members of Congress. In August, every member decamps for home and this is a great time to setup meetings and invite your member of Congress to visit your company. There’s no greater way to show a member the power of an ESOP than to have he or she visit your company and see firsthand.

If you would like information on how to setup a meeting, visit The ESOP Association’s website and download a copy of the Congressional Company Visit Kit: Practical Steps for Unparalleled Results – http://www.esopassociation.org/. It is available on the homepage under News.

Having a member of Congress visit your company is one of the most important government relations activities you can undertake. It is that the most effective activity for obtaining support for ESOPs from a member of Congress. The company visit is more effective than a visit in the member of Congress’s home office and certainly more effective than visiting with a member of Congress in Washington DC.

Has member of Congress been to your company? Tell us about the visit.

Wednesday, July 23, 2008

Steve Sheppard on the Road for Employee Ownership

As part of the ESOP Outreach Program, Steve Sheppard frequently speaks to ESOP companies on how to harness to the power of employee ownership.

Now, in partnership with the Employee Ownership Foundation, Steve is scheduling speaking engagements with business leaders and opinion makers who are not aware of the transformational power of employee ownership through an ESOP.

Steve, former CEO of the employee-owned Foldcraft Company in Kenyon, Minnesota, will travel the U.S. speaking to local groups, such as the Rotary, Lions Clubs, Kiwanis and other civic groups about employee ownership. His presentation will be at NO CHARGE to the sponsoring organization!

If you are interested in having Steve speak to a civic group in your area, send an email to esop@esopassociation.org for more details.

Wednesday, July 30, 2008

Do You Really Know Who Supports Employee Stock Ownership?

The now famous Texas Congressman Ron Paul [R-TX] has consistently put his name on the line for employee stock ownership since he came to Congress in 1989. Most recently, he signed on to H.R. 6419 by Congressman Dana Rohrabacher [R-CA] that essentially would make broad based stock compensation plans tax free. Among insiders who keep track of those that support ESOPs and employee stock ownership, there is no doubt where Congressman Paul stands.

But there is a great deal of confusion about who in Congress really supports more employee stock ownership. Experience teaches that many ESOP advocates assume that her or his Congressperson, or Senator, is a friend of employee stock ownership because she or he was nice when they visited their office in DC, or when they visited at a civic club or town hall meeting.

A nice remark about employee stock ownership, however, is not good enough, as what employee ownership advocates need to protect stock programs such as ESOPs is more than nice words, and a pat on the back. A member of Congress needs to stand up for employee stock ownership, just as Congressman Paul, and Congressman Rohrabacher have done year after year by signing on to pro-ESOP, or pro-employee stock ownership proposals. And on the key committees, a vote for the pro-ESOP position, or a speech in public, before the press and colleagues, also qualifies as a true pro-employee stock ownership position.

Men and women elected to Congress, as a rule, are great “people” people; they are charming, gregarious, and know how to make other human beings feel good. But the key to judge by is, “Are they intense for employee stock ownership? Is employee stock ownership a priority?” If not, ESOP advocates should appreciate someone being nice when they visit, but nice does not deliver the goods.

Frankly, from 1980 through 1986, support for ESOPs and employee stock ownership in Washington was limited, but very, very deep, as it consisted mainly of the Chair of the Senate Finance Committee, Senator Russell B. Long, and the President of the United States, Ronald Reagan.

From 1986 through 1989, ESOPs had to rely on a handful of members to save ESOPs, such as Congressman Beryl Anthony [D-AR], Senator Max Baucus [D-MT], the aforementioned Congressman Rohrabacher, and Congressman Cass Ballenger [R-NC].

From 1989 through 2000, support for ESOPs was very wide, but shallow, as at one time over 100 members of Congress in the early 90s co-sponsored pro-ESOP legislation.

In recent years, we are unsure who among the majority party in Congress will really stand up with intensity and push to promote employee stock ownership. We are making progress, but there is not a comfort level that any Democrat in Congress would fight for employee stock ownership.

Do you know how your member of Congress and your Senators feel about employee stock ownership? Would they publicly take a stand to promote and protect employee stock ownership?

In other words, are they like Congressman Ron Paul who will openly take a public stand for employee stock ownership? Or are they just being nice to you?

August 2008

The following articles appeared in August 2008.

Wednesday, August 06, 2008

Future of ESOPs

What does the future hold for ESOPs? A recent issue of the ESOP Report magazine asked readers to share a few insights on the future. Answers were wide ranging and quite thoughtful. Here are a few:

With the global economy, business practices are changing fast and companies that have an advantage over their competitors are going to flourish. An ESOP will be a competitive edge.

With education of business leaders and owners, we will begin to see more ESOP companies as people realize the potential employee ownership can bring to the company.

Companies understand that employee ownership is a performance booster and will begin using it to make the company more competitive here at home and abroad.

Universities will take the lead in research efforts and redefine the way capitalism works using employee ownership as the model.

Models of employee ownership will become more diverse as well as more common in the next 20 years.

Government relations efforts are now more important than ever and we need to stay on top of the game.

Where do you see ESOPs and employee ownership in 2028? What do you see in your crystal ball?

Monday, August 11, 2008

Employee Ownership Month 2008

Get Your Press & Event Planning Kit Today

What Will YOU Be Doing?

Every October, for over 20 years, The ESOP Association and its members have been celebrating Employee Ownership Month (EOM). Each summer, the Press & Event Planning Kit, which highlights EOM activities of members, is sent to all corporate members of the Association to help in planning events. This year, it will once again be shared with the community, but with a twist. This year the Press & Event Planning Kit will go electronic! Same great publication, new medium. To download your copy, click here – http://www.esopassociation.org/resources/resources_month.asp.

By going electronic, we can bring this publication to you for less cost and in a more timely fashion. It also allows us to offer more information to help in your EOM planning.

Employee Ownership Month is a celebration of the incredible spirit of employee ownership and an opportunity to educate employee owners about the tremendous benefits of ESOPs. It is also an opportunity to educate the public, elected officials, and the media as to why employee ownership through ESOPs is good public policy and this Kit will help you in your endeavors.

Wednesday, August 20, 2008

Economy – How is it impacting your company?

One can’t pick up a paper or turn on the television these days without seeing something about the economy. Gas prices are high, unemployment rates are on the rise, companies are increasing layoffs, and food prices are creeping ever upward.

How is your company being affected? Has it changed the way you do business? Are you cutting back on things that have always been a constant?

The more important question here is – has the ESOP made a difference? There is anecdotal evidence that shows in bad times, ESOP companies do weather the storm better. Increased communication and employee owners’ knowledge of the business and how it works have been cited as two ways ESOP companies do better in an economic downturn.

Are you doing anything differently?

Wednesday, August 27, 2008

Employee Ownership and Morale

Times are tough for a lot of companies today and many are making radical changes to make sure they pull through. Programs are being cut back and staff members are being asked to do more with less.

During these times, are you doing anything to increase morale? Are there more meetings to let employee owners know what is going on and how decisions are being made? Is management asking for ideas to help make things more efficient during the economic downturn which we seem to be shaping up for?

Every company handles communication efforts differently and some increase efforts to share information with employee owners as well as customers. The theory behind this thought being – informed employee owners and customers are better employee owners and customers. If your employee owners understand the implications better, does it increase morale?

What are your thoughts?

September 2008

The following articles appeared in September 2008.

Tuesday, September 02, 2008

The New York Times and ESOPs

There is a steady drumbeat arising from The New York Times against ESOPs and employee ownership.

Bear Stears was first, then U.S. Sugar, and now Fannie Mae and Freddie Mac are being highlighted as poster children for how bad an ESOP can be for a company. As a point of note here, Freddie Mac does NOT have an ESOP. However, the article goes out of its way to create tangential links between ESOPs and failing companies using all the above examples as reasons why individuals should not own stock in their companies.

It’s truly the height of arrogance to believe that average pay individuals should not own stock in the companies they work for. If this were true, there would be no small businesses, no family run companies in America. Subscribing to this theory, everyone would work for a salary and be happy with it. It’s elitism at its worst.

What do we do? We go one on one with our elected officials. Show them what it really means to be employee owned. Continue to shout our message loud and clear that employee ownership through an ESOP will make our country stronger. It will mean greater wealth creation for employee owners and stronger, more highly motivated companies in this global environment we live in.

Now is the time to show your member of Congress what it truly means to be employee owned through an ESOP, as we will never get national media, quoting elitist professors in ivory towers, to understand why broad based ownership is crucial to sustaining a fair and just, capitalistic society.

In 2008, 92.4% of survey respondents reported that creating employee ownership through an ESOP (employee stock ownership plan) was “a good business decision that has helped the company.” In the 17 years this survey has been conducted, this is the highest figure ever reported with the average over the last nine years at approximately 88%. In addition, 70.5% indicated the ESOP positively affected the overall productivity of the employees; another record number reported in this category where the average has been 63%. In terms of profitability, 66% of companies responding reported that profitability increased over the prior year and 71% stated that revenue increased.

In addition, the survey asked companies to indicate their performance in 2007 relative to 2006:

Wednesday, September 10, 2008

ESOP companies and the community

Last summer The ESOP Association’s magazine, the ESOP Report, focused on ESOP companies and how they are a part of the communities they serve. There were wonderful stories from companies about how the employee owners took chances and became involved in community projects and how they tied the work back to the company and its employee owned status. If you would like to read more, check out The ESOP Association’s website at – http://www.esopassociation.org/. Archived copies of the ESOP Report can be found in the members only section.

We know there are many stories out there and we know they take place all year long, not just during Employee Ownership Month. By the way, if you’re interested, you can download a copy of the 2008 Press & Event Planning Kit from The ESOP Association’s website at – http://www.esopassociation.org/pdfs/2008_press_kit.pdf.

So tell us, what has your company done to become more involved in the community?

Tuesday, September 16, 2008

Employee Ownership Month is almost here!

October is right around the corner…

If you’re in the process of planning your Employee Ownership Month events, take the time to download a copy of the 2008 Press & Event Planning Kit.

In 2008, the Kit will be available exclusively in electronic format making it more timely and cost effective. A complimentary copy of the winning 2008 poster by Consolidated Shoe Co., Inc. of Lynchburg, VA (featured on the cover of the 2008 Press & Event Planning Kit) will be sent to all corporate members of the Association in the coming weeks. If you would like to order additional copies of the poster or items for Employee Ownership month, click here – http://www.esopassociation.org/esopstore/ or call 202/293-2971.

Friday, September 19, 2008

Should Public and/or Large Employers Have ESOPs?

The recent collapse of major publicly traded employers with significant amounts of stock ownership among employees have triggered the expected extremely negative stories about, as one financial “expert” said, the “stupidity” of employees owning stock in the companies where they work. [This particular story was about Lehman, where it is estimated 25% of the stock of Lehman’s was owned by employees through a variety of stock compensation arrangements, none of which were ESOP, and none of which impacted any employee’s formal ERISA retirement plan.]

The stories were sent out to the Association’s leaders such as Chapter officers.

While we often hear a voice or two proclaiming that negative stories about large and/or public companies’ employee stock ownership plans don’t mean anything because these companies “don’t have real ownership” and members of The ESOP Association need to tell their members of Congress this message; we were shocked about the strong push back to the latest e-bulletin from many who are more than willing to “kill” ESOPs in public and/or large companies because they are just giving “real” ESOP companies, such as the one where they work, a bad name, and thus jeopardizing their tax benefits of being ESOP.

[Keep in mind, over 90% of the Association’s members are ESOP companies with fewer than 500 employees, the classic break point used to describe small business.]

So the issue arises, should the ESOP community throw, to use the hottest term in politics, “throw big companies with ESOPs, or even employee stock ownership schemes under the bus?”

From this vantage point, the answer is no. Around 50% of Americans work for large employers, most publicly traded. To say that these people cannot be owners undermines the entire philosophical reason for having employees BE owners. The Association’s Vision would have to be changed, as it does not say only employees of small businesses should be owners.

Furthermore, what many who say throw the big employers with ESOPs under the bus do not realize is that many small, privately held ESOP companies have gone bankrupt since ESOPs were created; while they might not be the topic of a story in the big national papers, such as The Wall Street Journal, or The New York Times, they were very much noticed in smaller, regional newspapers.

But it is not our job to dictate what the Vision of the Association should or should not be, and comments about the debate in the ESOP community over whether ESOPs should be limited to small employers, or even non-publicly traded employers, might be helpful to clear the air of just what do we expect from employee stock ownership in a capitalistic society.

September 23, 2008 (Washington, DC) – Today, The ESOP Association was pleased to receive a statement by Republican Candidate for President, Senator John McCain, declaring his support for employee stock ownership through the employee stock ownership plan (ESOP) model. This statement was conveyed to The ESOP Association by a Senior Policy Advisor to the McCain-Palin Campaign. It reads as follows:

“For millions of Americans owning a stake in the company they work for is extremely rewarding. Many Americans are able to “work for themselves” through their participation in Employee Stock Ownership Plans (ESOPs). These broadened ownership plans allow American workers the ability to participate directly in the growth and success of the companies for which they work.

About 90 percent of ESOPs are in small businesses with less than 500 employees. We all know that small and entrepreneurial businesses are the lifeblood of the American economy. These businesses that are often unable to match the substantial health care and other benefits that are normally provided by major corporations, due to the cost, are able to provide employees increased retirement benefits and stable employment because of ESOPs. Research has shown that ESOP-owned companies are usually more productive and profitable than other companies, as well as having better survival rates.

For these reasons, I am proud to support ESOP-owned companies and the role they play in the American economy. As President, I would endorse efforts to learn from the successes of ESOP companies and see how their positive impact can be expanded.”

The President of The ESOP Association, J. Michael Keeling, had this comment in response to Senator McCain’s statement:

“Senator McCain’s statement will be welcomed with gratitude by the ESOP community. The Senator is the first candidate for the highest office in our nation to endorse employee ownership through an ESOP and to pledge support for these important national polices since former President Ronald Reagan. Senator McCain’s statement wasn’t demanded by any interest group or spurred by any questionnaire. He is committed to these goals, and The ESOP Association will share his statement with its 2,500 members and the one million ESOP participants working for Association members. Again, I emphasize that The ESOP Association welcomes Senator McCain’s commitment to this cause.”

The core cause of The ESOP Association is the belief that employee ownership will improve American competitiveness, increase productivity through greater employee participation, and strengthen our free enterprise economy.

###

October 2008

The following articles appeared in October 2008.

Thursday, October 02, 2008

ESOP Community Celebrates Employee Ownership Month!

This October, The ESOP Association and the employee ownership community will celebrate Employee Ownership Month, which is a tribute to the incredible spirit of employee ownership.

Employee Ownership Month is an opportunity for ESOP companies across the U.S. to educate employee owners and the public about the tremendous benefits of ESOPs. Companies celebrate with picnics for employee owners, roundtable discussions with local public officials, and award ceremonies to honor outstanding employee owners.

Employee Ownership Facts:

There are approximately 11,000 ESOPs in place in the U.S., covering 10 million employees.

Total assets owned by U.S. ESOPs are estimated to be $800 million.

The Economic Performance Survey conducted by the Employee Ownership Foundation earlier this year found:

66% of ESOP companies indicated a better performance in 2007, relative to 2006

71% indicated that revenue increased in 2007

In terms of profitability, 66% indicated that profitability did increase in 2007

For more information on ESOPs and Employee Ownership Month, please visit The ESOP Association’s website at www.esopassociation.org.

Wednesday, October 08, 2008

There Is No Silver Bullet

It is human nature to look for the “big” fix, the “settled once and for all time” solution, or as they say in the software world the “killer app.”

Advocates for employee ownership through ESOPs are no different. Often people submit to the discussion about how to ensure ESOPs remain favored in law that “if only we had the research, or data, that would prove once and fall that ESOP participants have more retirement income than employees in non-ESOP companies;” or, “if only we had research by the leading social research team in the world that ESOP companies are more productive and more profitable than non-ESOP companies;” or, “if only we had data that showed employees at ESOP companies are happier, and better citizens;” or, “if only the reporters of the Wall Street Journal, or the New York Times would visit real ESOP companies instead of those run by crooks like at Enron, Fannie Mae, etc.;” or, “only if business school professors would teach about ESOPs to the next generation of business leaders in a positive manner;” then we would never have to worry about Congress, or the Federal agencies hurting ESOPs because they would know what we know, ESOPs are good for America, the companies, and the companies’ employees.

But, there is no silver bullet answer to the criticism of ESOPs as being too risky for average pay employees, who merger savings should be in safely diversified investments.

And besides, generally since the 1980s, there is data that ESOPs do all the positive things mentioned above. The Employee Ownership Foundation is consistently paying for new research to validate the old research, and to do it with more points of data. And, the Foundation is reaching out to academia, and seeing more positive attitudes about employee ownership among leading academics. And, ESOP advocates may not realize it, both the Wall Street Journal, and the New York Times have written positive employee ownership stories about real ESOP companies over the years.

No, just like everything else in life, there is no silver bullet tactic to win for ESOPs; winning will take patience, patience, patience, conveying the message of the power of employee ownership over, and over, and over, one target at a time, be it a member of Congress, a reporter, or an academic.

In other words, there is no silver bullet out there that will make once and for all, the vast majority of decision makers in America committed to protecting and expanding employee ownership.

Comments welcome.

Tuesday, October 14, 2008

Four ESOP Association Members Named 2008 Top Small Workplaces

Four members of The ESOP Association, ATA Engineering Inc., San Diego, CA; Jackson’s Hardware Inc., San Rafael, CA; King Arthur Flour Company, Norwich, VT; and New Belgium Brewing Co., Fort Collins, CO have been named among the Top 15 Small Workplaces. This is the second annual list of the best small businesses in the U.S. which was compiled by The Wall Street Journal and Winning Workplaces, a nonprofit group which provides consulting services to small businesses.

“It is pleasing to see four of the Association’s member companies among the winners,” said J. Michael Keeling, President of The ESOP Association. “What is really amazing about this story is that the number of small businesses that sponsor an ESOP is less than 1% of the total number of small businesses in America, but out of these companies, 27% are employee owned through the ESOP. The Wall Street Journal and Winning Workplaces saw the obvious in these companies.”

The winners were featured in a special small business section of The Wall Street Journal in print and online. To qualify, companies need to employ 500 or fewer individuals and have revenues of $200 million or less. The winners were chosen based on their success in creating a culture fostering professional growth opportunities, and unique benefits.

Wednesday, October 22, 2008

Government Relations Activities

It’s an election year, and we realize you might well be sick and tired of us talking about this, but we are going to say it one more time – get out there and talk to your members of Congress!

We need an army of employee owners to interact continuously with elected officials to prove that pro-active positions for employee ownership and ESOP laws will improve America’s economy in a way that is fair to all wage earners.

Many leaders are cynical when it comes to employee ownership through ESOPs. We need to show them what it really means to be employee owned and what they can do for a company.

House Concurrent Resolution 333 – This short resolution makes it clear that, based on 33 years of experience with ESOPs the vast majority of ESOP companies are high performing companies and the Congress therefore expresses continued support for employee stock ownership plans.

October 29, 2008 (Washington, DC) – The Employee Ownership Foundation (EOF), Aspen Institute Center for Business Education (Aspen CBE), the Foundation for Enterprise Development (FED) today announced their collaboration on the creation of a Curriculum Library on Employee Ownership (CLEO). CLEO will be housed on CasePlace.org, Aspen CBE’s free online resource for up-to-date case studies, syllabi and other innovative teaching materials on business and sustainability. The site will now offer the largest collection of university teaching materials on employee ownership—including such areas as broad-based equity compensation and shared capitalism—available to business school faculty.

Aspen CBE has also created a new teaching module within the entrepreneurship discipline and a faculty briefing paper that specifically address the question of employee ownership in business today.

“CasePlace, which is the leading resource for business school teaching materials that incorporate social and environmental elements into mainstream business school discussion topics, is the perfect home for this new employee-ownership focused library,” said Rich Leimsider, director of Aspen CBE. “In light of the turbulence and change businesses have recently been experiencing, employee ownership offers an interesting perspective into the role of business in society. It is important that the next generation of business leaders understand that a variety of business models exist and we are delighted to be working with FED and EOF on this project.”

In addition to CLEO, the three organizations have announced the funding of a competitive dissertation proposal award for doctoral students who are conducting trailblazing research on employee ownership. Applications for this award will be accepted starting in Spring 2009. More information will be available at that time on the websites of these collaborating organizations.

“The relevance of ownership models for today’s students is higher than ever before,” said Mary Ann Beyster, FED president. “Now, for the first time, there is a place for collecting and disseminating university-based research and teaching materials on the principles and mechanisms of employee ownership. The FED and EOF share a common mission – to ensure a better understanding and awareness of where employee ownership can make a difference in individual wealth and well-being, competitiveness, national innovation and development. It is exciting to see very talented faculty and students engaged in this field. Working with Aspen CBE has helped place employee ownership into content for the 21st century organization.”

“I am pleased the Employee Ownership Foundation is able to take part in this new collaborative initiative working with Aspen CBE and FED,” said Joseph Cabral, chair of the EOF. “This tool will help business students and entrepreneurs build a solid understanding of employee ownership, the role it plays in the business world today, and gain an appreciation of its potential to positively impact the future.”

The Foundation for Enterprise Development (FED) was established in 1986 by Dr. J. Robert Beyster to help promote the concept of broad-based, participative employee ownership and entrepreneurism. As a private foundation, the organization promotes these business principles and practices through catalyzing new research, education, policy development and knowledge sharing that helps cultivate future generations of entrepreneurs in science and technology communities. The FED is currently sponsoring research fellowships on employee ownership at six universities. Applications are now being accepted. For more information visit www.fed.org.

The Employee Ownership Foundation (EOF) supports research, education and public awareness programs that will increase the level of understanding and appreciation of the benefits of employee ownership and increase the number of employees who have access to this benefit. For more information, check out www.employeeownershipfoundation.org.

The Aspen Institute Center for Business Education (Aspen CBE) equips business leaders for the 21st century with a new management paradigm—the vision and knowledge to integrate corporate profitability and social value. To that end it provides business educators cutting-edge classroom resources and creates peer networks to incorporate social and environmental stewardship into teaching, research and curriculum development.

Aspen CBE is part of the Aspen Institute Business and Society Program, an organization dedicated to developing leaders for a sustainable global society. Through dialogues and path-breaking research, it creates opportunities for executives and educators to explore new pathways to sustainability and values-based leadership. Go to www.AspenCBE.org for more information.

November 2008

The following articles appeared in November 2008.

Wednesday, November 05, 2008

2008 Election and ESOPs

Well, we didn’t want to neglect mentioning the important and historic election which took place yesterday, but we also didn’t want to give away too much by talking about the results of the election in this space.

There are many things we can say, many things we can speculate about, but we are not going to. Why? Next week at The ESOP Association’s Las Vegas Conference & Trade Show, Association President J. Michael Keeling, will be talking in detail about the election and what it may mean for ESOPs and employee ownership in the coming years.

We are going to leave a few things unsaid until that time but – WE WANT TO KNOW WHAT YOU THINK!

Tell us what you think is in store for ESOPs and employee ownership under President Elect Barack Obama.

Tuesday, November 18, 2008

Foundation Reaches $50,000 Goal at Las Vegas Conference & Trade Show

Yes, you read the correctly. At the ESOP Association’s Las Vegas Conference & Trade Show held last week, the Employee Ownership Foundation raised over $50,000 with the generous help of the employee ownership community.

The largest single donation was made by the employee owners of Norcal Waste Systems, Inc. located in San Francisco, CA. The incredibly charitable employee owners donated over $27,000 to the Foundation.

Keep an eye on this space as photos from the Conference and more information on the Foundation’s fundraising goal will be posted here later in the week.

Monday, November 24, 2008

[Note: Below are remarks delivered by ESOP Association President, J. Michael Keeling, at The ESOP Association’s 2008 Las Vegas Conference and Trade Show on November 14, 2008, on the impact of the Presidential Election. All rights reserved by The ESOP Association.]

I gave similar remarks as I give today in 1992, 1994, 1996, 1998, 2000, 2002, 2004, and 2006; never have I faced such a conflicting set of thoughts in crafting my remarks, such hesitancy, and even worry that my remarks will not help our ESOP community win our cause on Capitol Hill. I worry that all the wonderful progress our Foundation is building to make America aware of the power of employee-owned companies will be for naught, as my remarks may cause pessimism, and loss of hope.

But it would be wrong not to say what I think. I have a fiduciary duty to you, members of The ESOP Association—the best group of business people in America, the most progressive group of business leaders in America—not to tell you what I see for our ESOP cause in our nation’s capital in the year 2009, and even beyond in 2010.

Before I do, let me make it clear that, while it may be an old man’s feeble mindlessness—I believe in our democracy. I believe, that except for a few bad apples, the men and women who serve in Congress are good people.

I believe the men and women who work for President Bush are good people.

I believe the men and women who work for, and will work for President-elect Obama, are good people.

I believe the men and women who work for Senator McCain are good people.

If you disagree, then I have to disagree with you.

I cannot demonize our people, our Congress, our President, as the 24/7 cable news people do, or as the bloggers do.

Let me say, I have always enjoyed working for the Board of The ESOP Association, because as advocates of employee ownership that believe in the people, therefore believe that we will move forward with decency, not bile, not negativism.

Let me say, in the 30 year history of lobbying by The ESOP Association, we have never lobbied in an “us versus them” vain, with a negative story, but always with a positive attitude.

But reality is reality.

When I think of the 2008 election results, the major thought I have is Yogi Berra’s observation:

“This is déjà vu all over again.”

May I be personal? I grew up in Deep East Texas—where the style and culture was the same as the old South of plantations, slavery, and Jim Crow laws, in fact, and in practice.

I was the product of a segregated high school. My father served on the City Council, and had to struggle to have the streets paved in the part of town that was derisory called “the colored section,” and he had to struggle to get the City Council to buy chicken wire for a back stop for the only baseball field, that had no grass, in the so-called “colored section” of town.

As so many Americans of my background feel, Senator Obama’s election is n amazing tribute to the wonderful, majority make-up of America.

For me, the most brilliant moment of the campaign was when my son, 30 years old, said to me on election night, “When my friends and I talk about Senator Obama, we never talk about his race.”

Having said all of this, what the election results say to me is –

We are back to the 80s.

In 1984, we, the ESOP community had to fight for our lives in the House tax committee, the House Ways and Means Committee; we had to fight for our lives in 1985; we had to fight for our lives in 1987; we had to fight for our lives in 1989.

And while we had to fight for our lives, we won more often than we lost.

We survived.

The House Ways and Means Committee in the 80s was controlled by the Democrats—just like in 2009/2010.

So you say — if there are threats to ESOP law, will we not win more than we lose, again?

First, will there be threats to ESOP law, and they will be different from the threats of the 80s.

The threats are clear –

One Congress will have to tend to major tax legislation in 2009/2010. Some say there were no big major tax bills in 2007/2008, why should there be such a bill, or bills, in 2009/2010?

Here are the reasons:

The current tax rate for capital gains will expire at the end of 2010, and go back to levels of the 20th Century.

The current tax rate for dividends will expire at the end of 2010, and go back to levels of the 20th Century.

After a one year repeal of the estate tax, it will revert to the levels of the 20th Century.

Congress must do something about the individual Alternative Minimum Tax that will soon tax couples making $75,000 or more to taxes in addition to their regular taxes. Let me say, in this day and age of two income families, $75,000 is not a high income for a wife and husband trying to raise a family, and make ends meet.

President-elect Obama has pledged to make major changes in the current Federal tax laws.

Two, let us not forget, the Chair of the House Ways and Means Committee, the most powerful person in America with regard to Federal tax law, has proposed, and is serious about a major overall tax reform effort. In 2007, he introduced a blue print for such a tax reform bill. For those who assumed his tax reform positions would go away, they have no sense of how the tax legislation process works. His 2007 positions are not vanishing in thin air, never to be heard of again.

And as you know, his 2007 tax reform proposal contained a very negative S ESOP proposal, that I will not go into detail about now, but which let me say would end basically all non-qualified deferred comp in an S ESOP, thus making it impossible for an S ESOP to compete for leadership in top executive positions.

To understand why ESOP law would be in the mix, you have to understand that there is a growing consensus, a bi-partisan consensus, that the Federal corporate tax rate on C corporations should be reduced, anywhere from 6 to 10 percentage points.

The Republicans are for this reduction because it jives with their core values that taxes should be lower; the Democrats are tilted for this alteration because some do believe our Federal tax rate is too high, and others see the rate reduction as a tactic to get the Republicans to support tax reform proposals that Democrats desire.

In fact, both Chair Rangel’s tax reform bill, and a Treasury Department proposal call for a reduction in the corporate tax rate.

And here is what is important, both propose that the rate reduction decrease in revenues be paid for elimination of so-called corporate tax “loopholes,” and this is where ESOP law comes into the picture.

Chair Rangel has put forward a proposal that says the S ESOP use of non-qualified deferred comp is a tax loophole; the Treasury Department says all ESOP tax benefits are loopholes that should be eliminated. [The Congressional Budget Office has said the same thing by the way.]

But there are more changes in comparison to the 80s.

The collapse of the stock market has triggered a “war” on 401(k) plans specifically, and on defined contribution plans in general

The drumbeat from the leaders of the two House committees with jurisdiction over ERISA plans is that all retirement savings plans should not have any risk, that all private sector plans should be like defined benefit plans. [The two committees are the House Ways and Means Committee, and the House Education and Labor Committee.]

These leaders are joined by prominent media pundits, such as Jane Bryant Quinn, a nice person who I spoke with just recently about ESOPs, but who says, “An employee who works for a company with an ESOP should find another job,” and her remarks go along with what we have read in national newspapers recently, which is, “the stupidest thing a person can do is own stock in the company where they work.”

What is an ESOP? It is defined contribution plan, primary invested in one asset, employer stock. So efforts to change defined contribution plans, to limit risk to almost zero, will reverberate against ESOP’s standing in the law.

We must be aware of the overall current rants against 401(k) plans, and defined contribution plans.

What do we know about President-elect Obama’s view of ESOPs?

All we know is what was written in a letter to Illinois ESOP advocates in 2005. In this letter, he express a generalized recognition that employee ownership, and ESOPs can be positive, and have some kind of role in our nation. But he concludes that recent examples of ESOP companies going under trigger a thought that perhaps ESOP law needs change to prevent too much risk.

What I now say is pure speculation on my part, but I do not believe I am too far off the mark. As an elected official representing Chicago in the Illinois State Legislature, and in the Congress representing the rest of Illinois as well, President-elect Obama has to have had many an employee of United Airlines complain about the United ESOP. He has to have heard complaints from the failed Peoria company, Foster and Gallagher, and as a former law professor at the University of Chicago, the many law suits arising there from.

What about the early news of those on his transition team of economic advisors?

In the 80s one worked for a U.S. Senator, and told me in no uncertain terms that ESOPs are flim flam.

It is rumored that perhaps the new Secretary of Treasury will be Lawrence Summers who vigorously opposed former Senator Breaux’s pro-S ESOP position in 1999 and 2000.

Reading through the tax policy team of the President-elect’s transition office, I see only one person who comes from a background that was pro-ESOP.

Here is also what is different from the 80s.

In the 80s we had a friend in the White House for ESOPs: President Ronald Reagan. Whenever the negative ESOP view would surface in the Treasury Department in the 80s, I can assure you that the word from the White House set the men and women at Treasury straight on ESOP law.

But even more important, we had friends of ESOPs among the Democrats who served on the House Ways and Means Committee in the 80s: Beryl Anthony, Jake Pickle, Charles Rangel, Jim Jones, L.F. Payne, and others.

Today, right now, we do not have one Democrat on Ways and Means who we can be sure will lead the charge to protect ESOP law, or to expand ESOP law, when the tax bills of 2009 and 2010 are written in that Committee, keeping in mind what that Committee does represent, based on past data, 80 to 85% of what becomes law.

We must move more Democrats to be for ESOPs.

We must persuade Democrats on Ways and Means to be for ESOPs.

If your member of Congress is a Democrat, but does not serve on Ways and Means, ask her or him to convey to her or his colleagues on Ways and Means a pro-ESOP message.

We have already had progress in this regard — our New England friends have met with nearly all House members in New England, all of whom are Democrats now. Some are members of Ways and Means.

Our California ESOP leaders have met with key Democrats on Ways and Means who are from California.

We have had a business with interests in Tennessee liaison for ESOPs with a member of Ways and Means from Tennessee.

An ESOP advocate in North Carolina persuaded his Democratic member to call directly the Ways and Means staff about the negative S ESOP proposal.

And if your member of Congress is a Republican, continue to persuade her or him to be for ESOPs, and to convey that view to the top Republican member on Ways and Means, who Chair Rangel will listen to on tax issues that are not “super” issues, and the ESOP issues are not at this time “big-time, super” issues in Ways and Means.

And let us not be only on the defense.

In 1990, our former super Champion on Ways and Means, Beryl Anthony, said that we had to be on the offense, as a good offense is the best defense. He said by putting forward pro-ESOP proposals we would uncover those members of Congress who would stand up for ESOPS.

We will be on the offense, and we will try to get men and women to say, “Yes, I support more employee ownership through ESOPs, by publicly endorsing pro-ESOP proposals.”

We need you to ask for that support once our current ESOP champions introduce pro-ESOP legislation.

Let us be bold for more employee ownership through ESOPs.

Let us not intend to fail, even in this time of uncertainty.

Let us remember we are in the push for ESOPs for the long term.

We can win; we will win with you and your company’s help.

Thank you.

This article originally ran as the Washington Report in the November 2008 issue of the ESOP Report.

Wednesday, November 26, 2008

Change? Employee Ownership?

The article highlights a social networking website called change.org (http://www.change.org/) which, according to the article, is asking people to tell them what direction they think the country should go in and, under the economy heading, the idea of more employee owned companies garnered the most votes. They do not mention ESOPs specifically, but the conversation is heading in the right direction.

According to the change.org website, this is intended as a lobbying campaign and the top suggestions will be presented to the new Obama Administration. For more information on how this project will work – http://www.blogforchange.org/?p=31.

There is a lot of talk in this community about why the government is not more supportive of employee ownership. Well, maybe we just need to find a new way to deliver our message. Take a look at the site and tell us your thoughts.

Several companies this year included in their entries information about company to company events they held as part of their ongoing communications efforts. They reached out to ESOP companies in their area and simply asked them over for a visit. Some of the meetings involved a tour of company’s facilities, a meeting of employee owners, and in some instances, a barbeque.

Have you done this at your company? If so, what were the results?

Thursday, December 11, 2008

Company to company meetings – How do you get the most out of the experience?

This post is a follow-up to one last week about reaching out to other ESOP companies.

We are going to conduct an informal poll here on the blog and we want to know –

If you’ve hosted a company to company meeting or have taken part in one through an ESOP Association Chapter event, what made it so special? What did you learn as part of the experience?

There are so many ways to share the ESOP experience with other companies and we want to hear from you. We want your opinion on what it really takes to make a company to company meeting something to remember.

Wednesday, December 17, 2008

Nice News for a Change

After a week of negative news articles about ESOPs, we thought we would pass along a more positive piece that appeared in Axiom News, a news agency in Canada. Unlike most of the recent articles on ESOPs, this one is well balanced and shows employee ownership through an ESOP in a positive light.

Does becoming an ESOP naturally promote better business practices?President of the ESOP Association shares his views on why the model can promote greater participation andproductivity Tuesday December 9, 2008 — Camille Jensen

Tuesday, December 30, 2008

Mission & Vision OR Why We Do What We Do

Sometimes it pays to repeat ourselves.

Our Vision

We believe that employee ownership improves American competitiveness…that it increases productivity through greater employee participation in the workplace…that it strengthens our free enterprise economy and creates a broader distribution of wealth…and that it maximizes human potential by enhancing the self-worth, dignity, and well-being of our people.

Therefore, we envision an America where employee ownership is widely recognized as a catalyst for economic prosperity…where the great majority of employees own stock in the companies where they work…and where employee ownership enables employees to share in the wealth they help create.

And we look for our nation to become for all the world an example of prosperity with justice through employee ownership.

Our Mission

To educate and advocate about employee ownership with emphasis on ESOPs.